United Rentals to buy rival equipment rental company Ahern Rentals

United Rentals, a North American equipment rental company, has agreed to acquire Ahern Rentals in an all-cash transaction valued at around $2 billion to expand its presence in the US.

The proposed acquisition of the family-owned rival equipment rental company is expected to augment United Rentals’ branches, fleet, and expertise to cater to the customers in the US coasts and the Gulf region.

According to United Rentals, the transaction will increase its available fleet to customers by more than 60,000 rental assets with an original cost of $1.85 billion, and around $145 million of non-rental fleet.

Ahern Rentals’ rental fleet consists of mainly aerial and material handling equipment, accounting for more than 75%.

Established in 1953, Ahern Rentals caters to approximately 44,000 customers in the industrial and construction segments.

The equipment rental company employs around 2,100 people and operates 106 locations across 30 American states.

Ahern Rentals registered $310 million of adjusted EBITDA on total revenue of $887 million, for the trailing 12 months ended 30 September 2022.

Don Ahern — Ahern Rentals CEO said: “I’m proud of what we’ve built at Ahern Rentals over nearly seven decades, and I’m extremely pleased that the combination with United Rentals will take the business forward in this next chapter of growth.

“I want to thank our employees for driving the results that make this transaction possible. This is a strong outcome for both organizations and our customers.”

United Rentals said that its combination with Ahern Rentals is anticipated to generate annualized cost synergies of around $40 million within the first 12-18 months of the completion of the deal.

Sullivan & Cromwell served as legal advisor to United Rentals.

Matthew Flannery — United Rentals CEO said: “Our acquisition of Ahern Rentals supports our strategy to deploy capital to grow the core business and drive shareholder value.

“We view ourselves as the ideal owner of these assets within our network, as customers will benefit from the combination of the two organizations moving forward together. We’re leveraging our competencies in larger-scale M&A to augment both our near- and long-term earnings power.”

Anticipated to close by the end of this year, the deal is subject to customary conditions.